Turkey’s Silver Imports Surge to Most Since 1999 as Prices Slide

By Nicholas Larkin -
Jan 2, 2014

Turkey’s silver imports climbed in
December to the highest since at least 1999 and inbound
shipments of gold rose to the most since July as the metals
capped their biggest annual decline in more than three decades.

Imports of silver gained to 41.6 metric tons last month, 36
percent more than in November and above September’s amount of
39.9 tons, according to data on the Istanbul Gold Exchange’s
website going back to 1999. That took the full year figure to
227.8 tons, 60 percent more than 2012 and compared with 42.1
tons in all of 2011. Gold imports increased 64 percent in
December to 31.6 tons, the data show.

Silver plunged 36 percent in London last year and gold slid
28 percent, both the most since 1981, as some investors lost
faith in the metals as a store of value. The U.S. Federal
Reserve is slowing stimulus amid an improving economy and global
equities reached the highest since 2007 this week. While
investors sold bullion from gold-backed exchange-traded
products, lower prices boosted jewelry, bar and coin demand from
the U.S. to China.

“Some people took the opportunity of lower prices and
bought remarkable amounts of gold and silver,” Daniel Briesemann, an analyst at Commerzbank AG in Frankfurt, said
today by phone. “Generally, prices are very attractive. Demand
is very robust in Turkey and the Arab world as well.”

Silver for immediate delivery rose 3.4 percent to $20.08 an
ounce by 3:42 p.m. in London. It fell to $18.8266 on Dec. 31,
the lowest since July. Gold climbed 2 percent to $1,224.77 an
ounce after reaching $1,182.27 on Dec. 31, the lowest since
June. Last year’s drop was the first since 2000.

Turkey’s Imports

Turkey, which boosted gold shipments to Iran in 2012,
became a net importer of bullion after ending exports to the
Islamic Republic in July, the then Economy Minister Zafer
Caglayan said in August. World powers agreed in November to give
Iran about $7 billion in relief from economic sanctions over six
months, including the suspension of certain sanctions on gold
and precious metals.

Turkey’s gold imports totaled 302.3 tons last year, more
than double the previous year and the most since at least 1995,
according to the Istanbul Gold Exchange. Silver imports last
year were the most since at least 1999.

The U.S. Mint sold 14 percent more American Eagle gold
coins last year and sales at the Perth Mint in Australia
increased 41 percent. The premium to take immediate delivery
gold in China was at $20.28 an ounce today, compared with an
average of $16.21 in December and $18.72 for all of last year,
data compiled by Bloomberg show.

“Chinese physical demand for gold remains robust,” Victor Thianpiriya, an analyst at Australia & New Zealand Banking Group
Ltd. in Singapore, wrote in a report today. “However, the price
needed to trigger a sufficient demand response, and so a rebound
in spot gold, has declined over the past 12 months. Any rallies
in gold are likely to be short-lived given the likelihood of
Chinese premiums compressing if price rises too far.”